Big Tech & Private Capital Fueling $3T AI Data Center Boom

The global economy is witnessing an “absolutely immense” $3 trillion building boom in artificial intelligence (AI) infrastructure, a historic expansion of data centers driven by both the insatiable demands of Big Tech and a surging influx of private capital. This monumental investment underscores a fundamental shift as companies race to capture the rewards of the AI revolution, transforming the digital landscape and creating unprecedented opportunities for a diverse range of players.

Leading the charge are the tech giants, with Meta, Amazon, Alphabet (Google), and Microsoft collectively projected to spend a staggering $320 billion on AI and data centers in 2025, a significant leap from $230 billion in 2024. Amazon alone has allocated over $100 billion for AI and cloud growth, while Microsoft plans an $80 billion investment in AI-tailored data centers for fiscal year 2025, with more than half focused on the U.S. Google is also committing an additional $9 billion in Oklahoma over the next two years for cloud and AI infrastructure, including a new data center campus in Stillwater and an expansion in Pryor. These hyperscalers are not merely expanding existing facilities; they are pioneering entirely new infrastructure designed to manage the increased power density and heat generated by AI workloads. Hyperscale data center capacity is projected to expand by 20% annually after 2028, with the average capacity of newly opened facilities between now and 2029 nearly doubling that of current centers.

Crucially, private capital is playing an increasingly pivotal role, moving beyond venture capital’s focus on early-stage AI companies to prioritize the “picks and shovels” of the AI infrastructure boom. Private equity-backed data center mergers and acquisitions reached $18.15 billion globally in 2024, the highest total in at least five years. Firms like Blackstone are actively investing in data centers, recognizing them as the foundational infrastructure for the digital economy, poised to benefit from long-term demand for computing power. This private capital initiative is not only funding data center construction but is also projected to create over 100,000 new jobs. A landmark transaction exemplifying this trend is Meta’s $29 billion financing deal with PIMCO and Blue Owl, a hybrid of $26 billion in debt and $3 billion in equity, which serves as a blueprint for how private credit is becoming integral to funding capital-intensive AI infrastructure.

The expansion is global, with South Korean IT solutions provider LG CNS announcing plans to build a hyperscale AI data center in Vietnam through a partnership with Vietnam Posts and Telecommunications Group (VNPT) and Korea Investment Real Asset Management. This project, targeting Southeast Asia’s rapidly growing data center market, will encompass facility construction, hardware deployment, and network systems.

However, this unprecedented growth comes with significant challenges. The immense energy demands of AI data centers are straining existing power grids, with some hyperscale facilities requiring over 100MW of power, primarily due to cooling and computational needs. Data centers already account for approximately 1% of global electricity consumption, a figure forecast to more than double by 2026, potentially surpassing 1,000 terawatt hours. In the U.S., data center energy use could rise to between 6.7% and 12% of total electricity demand by 2028. This surge necessitates additional dispatchable power generation and has raised concerns about the mismatch between rapid data center construction and the slower expansion of energy infrastructure. Supply chain disruptions, particularly for critical infrastructure components, and rising construction material costs also present hurdles. Water usage for cooling is another mounting challenge, with some projects requiring a doubling of local water availability. Despite these challenges, the prevailing sentiment among investors remains strong, with 95% planning to increase their data center investments in 2025, demonstrating continued confidence in the sector’s long-term potential.